For immediate release
April 26, 2012
Email: [email protected]
Montpelier, VT/April 25, 2012 – The Vermont Energy Partnership urges the Vermont Senate to reject the $7.5 million tax increase the Shumlin Administration is trying to impose on Vermont Yankee. The Administration’s proposal is contained in the Miscellaneous Tax Bill (H. 782) which the Senate Finance Committee has approved.
This $7.5 million tax hike will create legal risks for Vermont taxpayers, create an unfair and unwelcome precedent for taxing businesses in the state, and threaten the loss of 600 high-quality jobs and $100 million a year from the Vermont economy.
The Administration continues its efforts to shut Vermont Yankee down, only this time it is by taxing VY out of business. To target one company with a 140 percent increase is punitive and the Vermont Senate should reject it. That is not the way we do business in Vermont.
Vermont Assistant Attorney General Scott Kline, in testimony before the Senate Finance Committee last week said, “If you decide to go forward and increase (the tax), you should be aware that we think there is a risk associated with that.”
The Vermont Energy Partnership hopes that fairness and common sense will prevail in the Senate and that this proposal from the Shumlin Administration will be defeated. To do otherwise could open the door again to more law suits involving the state and more costs for Vermont taxpayers.
Last year a Vermont federal judge ruled the state legislature has illegally interfered with the renewal of Vermont Yankee’s federal operating license. That ruling is currently under appeal.
The state says the proposed generation tax increase merely replaces the Clean Energy Development Fund assessment, but in fact, that assessment was based on two memorandums of understanding (MOUs), one with an agreed upon cap on the total amount of payments. The other only requires a further payment if power prices are higher than a specified amount in the MOU, which is not the case today.
Vermonters will not accept another round of legal bills and millions of dollars in additional penalties caused by the legislature’s lack of planning for the continuation of the Vermont Clean Energy Development Fund (CEDF). The future funding of the CEDF requires long-term, sustainable planning, not a fruitless, end-of-session money grab from a single source that is virtually guaranteed to face intense legal scrutiny.
The proposed tax increase sends Vermont down a slippery slope for singling out specific employers for legislative retribution through tax policy. This will not go unnoticed. Other manufacturers and employers will conclude, justifiably, ‘this year it is Vermont Yankee, next year it could be our turn.’ Their expectation of fair, stable, nonpolitical taxation, as the Vermont way of doing business and public policy, so essential for planning for a healthy future, will be eroded. Tax policy relies in part on precedent: what survived unchallenged before will be tried again.
In light of the above, the Vermont Energy Partnership recommends that the legislature:
Abandon the $7.5 million generation tax increase for a less risky, more equitable solution; and
Continue the ongoing policy discussion of creative, broad-based Vermont Clean Energy Development Fund funding sources, as well as spending goals.